Vietnam’s property slump continues

Experts believe that property prices in Hanoi will decline by 10 percent this year

The declining price of residential property in Vietnam will not aid the recovery of the country's real estate market this year, reported Vietnam Net Bridge.

Experts at CBRE Vietnam believe that the price of apartments in Hanoi will drop by a further 10 percent this year, after decreasing 12 percent in 2012.

Out of 55,000 operational enterprises in Vietnam's property market in 2012, 17,000 charted a loss while 2,637 were dissolved, according to a report.

The number of developers and real estate investment funds will drop by 50 percent in 2013, and by another 50 percent in 2014 before bouncing back at a later date, according to CBRE.

Property consultancy firm Knight Frank also predicts a gloomy 2013 for Vietnam's real estate market, with the transaction value of apartments set to decline during the first half of the year if the government does not introduce the necessary measures to aid recovery.

According to Vietnam Net Bridge, most transactions in the market this year will be registered in the low-cost segment.

The launch of several shopping malls within the next two years is expected to have a big impact on Hanoi's retail sector, and create fierce competition among retail centre developers. Vincom Mega Mall, Trang Tien Plaza, Ciputra, Golden Palace and Lotte Centre are all scheduled to open in Hanoi within the next two years.

Any government measures are unlikely to demonstrate a significant impact until mid 2013, according to property experts at Savills Vietnam.

Property experts at Cushman Wakefield believe that previous government measures implemented to help stimulate the real estate sector will fall short.

However, recovery can be observed in some market segments according to market analysts at Colliers. The current market climate should provide opportunities for financially powerful investors to take advantage of current prices and reap the profits at a later date.

Meanwhile, the impending completion of 17 new development projects in Hanoi will further increase the flood of residential supply, which already outstrips demand. In turn, this will fuel 2013's downward price spiral, according to Vietnam Net Bridge.

Article source: http://www.thethailandlinks.com/2013/03/04/vietnams-property-slump-continues/